REPLACING SME accounting rules with their international equivalent could damage the UK standard-setter’s reputation for quality, one of its board members has warned.
Edward Beale, a member of the Accounting Standards Board, told a packed audience at the ICAEW’s Moorgate Place that taking on IFRS for SMEs to supplant UK GAAP would “damage” the standard setter.
“So, the ASB’s role – I’d like to think we’re the best standard setter, the current plans would damage this. The ASB ought to review the IFRS standards and not just make limited changes for the sake of convergence,” said Beale.
“IFRS are not perfect, we shouldn’t be afraid to replace them,” he added.
Beale’s resistance to plans to wholly take on board IFRS for SMEs as the UK’s SME accounting code first came to light last September, when he stated his concerns in a letter to employment relations minister Ed Davey.
Today’s event, The ASB’s Plans for the Future of UK GAAP, heard ASB members and other speakers urge users of accounts to join the debate as to how the UK’s accounting structure should be formed.
Currently the ASB plans to replace UK GAAP with the IASB’s IFRS for SMEs standard in July 2013. The replacement for UK GAAP will be known as FRSME.
While the new standard comes in at just 400 pages long, compared to 2,000 pages for UK GAAP, the ASB is keen for discussion as to what, if any, optional information is required to make the new standard relevant for stakeholders in UK accounting.
ASB interim chairman Roger Marshall (pictured) said the board encouraged debate and consultation to influence the detail of its plans.
“We’re committed to the direction of travel, but agnostic on the detail,” said Marshall.
Another option discussed during the meeting was whether a three-tier system was required for UK accounting standards.
It was suggested that a lower barrier of complexity for the soon-to-be second tier, FRSME, could end the requirement for third-tier standard FRSSE. The FRSSE is the simplified version of UK accounting standards for the smallest companies. The ASB said it would consult separately on the FRSSE at a future date.
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